Mr Varoufakis said French President Emmanuel Macron “got angry” at Dutch Prime Minister Mark Rutte for demanding France carry out sweeping economic reforms to its pension system. He tweeted: “Macron got angry. Because Rutte said a reduction in French pensions should be a requirement to access the EU coronavirus rescue package.”
Time is pressing on for Brussels member states to reach a deal on proposals for a long-term budget and a stimulus plan ahead of a EU summit later this week.
There is no guarantee EU leaders will bridge their differences on the proposals by European Council President Charles Michel at the summit on July 17-18.
With more than 100,000 deaths from COVID-19, the EU is keen to demonstrate solidarity after months of bickering that has dented public confidence and put the bloc’s global standing at risk.
Mr Macron has repeatedly reiterated his position that a deal on the EU budget and recovery fund could be found at the July summit.
Emmanuel Macron lost his temper over plans for the European Recovery Fund (Image: GETTY )
Emmanuel Macron hit out against Mark Rutte (Image: PA )
He has called for the fund should include €500 billion of grants to the hardest-hit countries.
Mr Michel faces the hard task of narrowing differences between the wealthy, thrifty north and the high-debt south, hit harder by COVID-19, over how to respond to the coronavirus crisis.
He has presented a long-term EU budget of €1.074 trillion and a recovery fund of €750 billion for pandemic-hammered economies, with two-thirds of that to be in the form of free grants and a third issued as repayable loans.
But the Netherlands insists on conditioning access to the funds on economic reforms, something southern countries like Italy and Spain are eager to avoid.
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Mark Rutte has demanded France carry out sweeping economic reforms to its pension system (Image: PA)
Mr Rutte and the frugal four, including the Netherlands, Austria, Sweden and Denmark, want countries to carry out economic reforms to their labour, tax and pension systems to drive their economies towards competitiveness.
On Tuesday, Mr Rutte said he was pessimistic about the chances of reaching a deal over the proposed European Recovery Fund at a special summit, which will start this Friday.
Speaking during a debate in the Dutch Parliament, he said: ”The responses behind the scenes on our proposals do not make me hopeful about the chances to reach a deal.”
Mr Rutte said the main stumbling block was how to make sure that countries that would receive possible grants from the recovery fund would push through promised economic reforms.
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Spain’s PM said it would do its best to secure a deal this week (Image: PA )
Angela Merkel has said time is running out to agree on a deal (Image: PA )
Meanwhile, Spanish Prime Minister Pedro Sanchez said he sees “very difficult hours ahead” as he visited his Swedish counterpart Stefan Lofven today for talks ahead of an EU summit later this week.
Spain is among EU member states whose economies have been hard-hit by the pandemic and which want two-thirds of the recovery fund to be in the form of free grants.
Mr Sanchez told a news conference at the Swedish government’s summer residence Harpsund south of Stockholm: “We have different views on the answer to the crisis, but we share a common goal.”
EU’s budget factions mapped (Image: EXPRESS)
He said Spain would do its best to secure a deal this week, added: “The deal must be in July. Spain will do all it can to make it happen.”
Sweden, one of the bloc’s “Frugal Four”, wants a proposed recovery fund to distribute loans rather than grants while also seeking a smaller long-term EU budget, positions that have pitted it against countries such as Spain.
Meanwhile, German Chancellor Angela Merkel has suggested that a second summit will be needed if leaders fail to seal a deal on Friday and Saturday.
She said: “It would be desirable to reach a quick result but I don’t know whether there will be success on Friday and Saturday.
“Time is pressing.”